With final implementation of the Belize LLC Act, we are pleased to now offer LLCs through our service partner in Belize. In addition to LLCs that may be formed in the Cook Islands and Nevis, the Belize LLC adds a new dimension to asset protection planning.
The Belize LLC Act is modeled after its predecessor legislation in the Cook Islands and Nevis. However, in one key distinction, the Belize LLC Act adds a specific set of rules barring creditors from pursuing asset transfers to a Belize LLC. Specifically, a creditor cannot pursue an alleged fraudulent transfer to a Belize LLC, and creditors of LLC members are barred against pursuing asset transfers, after the earlier of (i) one year from the date of the formation of the LLC and (ii) two years after the earliest cause of action arises.
Referencing the date of LLC formation, as opposed to the date of an asset transfer, introduces a new dimension into asset protection planning not found with asset protection trusts. For example, assume Client establishes a Belize LLC in 2012 and transfers assets to the LLC in 2012, 2013, and 2014. Assume further that Client incurs a liability and has a court judgment awarded against him in 2012, and the creditor does not discover the transfers to the Belize LLC until 2014 (at which point the creditor brings a claim in the Belize courts). Which transfers can the creditor set aside? Apparently none. While the transfers in 2013 and 2014 are all within one year of the creditor’s action, and two years from when the creditor’s cause of action arises, the Belize LLC Act bars any relief if the LLC is more than one year old.
It will be interesting to see if other well-known asset protection jurisdictions such as the Cook Islands or Nevis decide to follow Belize’s lead on this. In the meantime, we expect the Belize LLC to become an important tool for asset protection planners and their clients.